🌍 The prolonged US-Iran war is choking the Gulf region’s economy in 2026

The forecasted economic recovery of Gulf countries in 2026 is quickly fading as the US-Iran conflict shows no sign of ending. Dubai and its neighboring countries are suffering sharp declines across a wide range of sectors: tourism, aviation, hotels, real estate, and major events.

Specific figures: Passenger traffic at Dubai airport in the first half of the year fell 31%, and hotel occupancy rates have also plunged sharply.

This is a warning bell for the entire region that was once seen as a safe destination amid geopolitical instability. As the war drags on, capital and tourists will continue to leave, triggering a chain reaction that ripples through global energy and financial markets.

Can the Gulf economy hold steady if the conflict moves into its third year?
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